Which of the Following Is True of a Stop-Payment Order

question 7

Multiple Choice

Which of the following is true of a stop-payment order issue to a bank?

• A) It is valid for 10 days if given orally.
• B) It is valid for 1 year if given in writing.
• C) A bank that pays a check in violation of a valid stop-payment order is liable to the drawer only if the drawer is damaged by this payment.
• D) A holder or indorser may stop payment on a check.

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Definitions:

Economic Efficiency

A situation where resources are allocated in a way that maximizes the production of goods and services.

Majority Voting

A decision-making process whereby a decision is made based on the preference of more than half of the members voting.

Public Good

This is a good that is non-excludable and non-rivalrous in consumption, meaning it can be used by everyone and one's use does not diminish another's.

Costs

The outlay or expenditure (monetary or otherwise) incurred by a business or individual in the process of producing or offering goods and services.